Villar: to cut rates in Colombia, the fiscal problem must be solved first
Banco de la República governor Leonardo Villar said at the Colombian Construction Congress in Cartagena that high interest rates hurt home purchases but are necessary to control inflation. According to Villar, high public spending made the central bank's task harder, and he noted the budget envisions a deficit of 9.4% of GDP, which would fall to 7.2% after the adjustment law. He called for fiscal policy to move in the same direction as monetary policy.
In 40 seconds
- Villar said high interest rates are a headache for housing but necessary to control inflation.
- He attributed part of the central bank's difficulty to high public spending and the government's large fiscal deficit.
- He said the budget envisions a deficit of 9.4% of GDP, which would fall to 7.2% after the adjustment law, comparable to the pandemic year.
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